The Baby Boomers might look down on them, but times are hard for Gen Z and the Millennials. Not only is the cost of getting a college education prohibitively expensive but the odds are that automation will turn that hard-earned degree into useless wallpaper before you’ve even paid off the loan.
In addition, real estate prices in many parts of the country are at or near all-time highs, and that means you’ll be paying more and earning less for your slice of the American dream. However, it is not all doom and gloom as the spirit of inventiveness still lives on in this country and with it are the twin concepts of flipping houses and travel hacking.
Did you know the two can go together? They can, and here are some tips how flipping houses can help you travel hack.
What is Travel Hacking?
While most people have heard of house flipping and the BRRR Method (Buy, Rehab, Rent, Refinance, and Repeat) of real estate investing, few are aware of travel hacking. This is a way to travel for free, or almost free, by opening credit cards and then spending the least amount needed to earn travel awards.
Granted you want to make sure that you can pay down the credit card balances, or you will end up trashing your credit score in the process. But if you can manage having multiple credit cards, then you might want to investigate which cards have the most attract award offers.
A great way to build up the points you need to redeem for a free first-class flight around the world is use the cards for expenses such as the costs associated with buying and rehabbing a home. The same goes if you are planning on renting out your real estate as you can use your credit cards to cover maintenance expenses. This means you go grow your award balances quite quickly.
A Few Things to Keep in Mind
Every time you apply for a credit card, you trigger what is called a “hard inquiry” of your credit report. When this happens the details of the prospective creditor go onto your report, and this can have negative impact on your credit score. As such, you want to close eye on your credit score and space out any applications for new credit cards to make sure you don’t end up trashing your credit rating in the process of chasing awards.
Besides, you will want to make sure that if you do have multiple credit cards that you tightly manage your usage of these cards and the balances which you carry. If possible, you don’t want to carry any balances on your cards but in the initial stages of a new project this might not be possible.
As such, a couple of keys to get the money you need to buy and rehab a home while not burning a hole in your credit report would be to consider either seller financing or a private mortgage. These are non-traditional loans and depending on the terms they might not be entered on your credit report – at least initially.
However, this doesn’t mean that you cannot purchase a home without credit. In most cases a private lender or a seller will want to review your credit history before deciding if you are worth the risk.
The lesson is that even if the transaction won’t be entered on your credit report, you will want to make sure that you closely manage your score as it will make it harder to get the financing you need, when you need it.
See the World Without Joining the Navy
As the song goes, “I joined the Navy to see the world, what did I see, I saw the see”. However, using your awards points is another way to enjoy free, or reduced price, airplane tickets and hotel rooms. This is a nice way to reward yourself between house flipping projects.
You do want to have a goal in mind, when it comes to where you want to go and how many points it will take to get there. As such, you should check your credit card account to see where you stand. From there you can plan your spending in a way to maximize the rewards.
Also, you might want to check if there any off-season specials where your points are doubled, or costs are reduced as this will enjoy your travel experience without going broke.
Finally, know when your points expire as there is nothing worse than banking your credit card awards points only to find out at the last minute that they are no longer valid. Flipping homes shouldn’t be all about making money as it can help you to accumulate the credit card rewards you need to travel for free.